Exhibit 10.1


 


SECURITIES
PURCHASE AGREEMENT


 


THIS
SECURITIES PURCHASE AGREEMENT (this “Agreement”)
is dated as of July 2, 2008, among CRDENTIA CORP.,
a Delaware corporation (the “Company”),
and the investors identified on the signature pages hereto (each, including
its successors and assigns, an “Investor”
and collectively, the “Investors”).


 


WHEREAS, subject to
the terms and conditions set forth in this Agreement and pursuant to Section 4(2) of
the Securities Act of 1933, as amended (the “Securities
Act”) and Rule 506 promulgated thereunder, the Company
desires to issue and sell to each Investor, and each Investor, severally and
not jointly, desires to purchase from the Company certain securities of the
Company, as more fully described in this Agreement.


 


NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants
contained in this Agreement, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the Company and each
Investor agree as follows:


 


ARTICLE I.

DEFINITIONS


 


Section 1.1                                      Definitions.  In addition to the terms defined elsewhere in
this Agreement, for all purposes of this Agreement, the following terms shall
have the meanings indicated in this Section 1.1:


 


“Action”
means any action, suit, inquiry, notice of violation, proceeding (including any
partial proceeding such as a deposition) or investigation pending or threatened
in writing against or affecting the Company, any Subsidiary or any of their
respective properties before or by any court, arbitrator, governmental or
administrative agency, regulatory authority (federal, state, county, local or
foreign), stock market, stock exchange or trading facility.


 


“Affiliate”
means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a
Person, as such terms are used in and construed under Rule 144 under the
Securities Act.  With respect to an
Investor, any investment fund or managed account that is managed on a
discretionary basis by the same investment manager as such Investor will be
deemed to be an Affiliate of such Investor.


 


“Business
Day” means any day except Saturday, Sunday and any day which is
a federal legal holiday in the United States or a day on which banking
institutions in the State of New York are authorized or required by law or
other government action to close.


 


“Closing”
means the closing of the purchase and sale of the Securities pursuant to Article II.


 


“Closing
Date” means the Business Day on which all of the Transaction
Documents have been executed and delivered by the applicable parties thereto,
and all conditions


 

















 


precedent
to (i) the Investors’ obligations to pay the Investment Amount and (ii) the
Company’s obligations to deliver the Shares and Warrants have been satisfied or
waived.


 


“Commission”
means the Securities and Exchange Commission.


 


“Common
Stock” means the common stock of the Company, par value $0.001
per share, and any securities into which such common stock may hereafter be
reclassified.


 


“Common
Stock Equivalents” means any securities of the Company or any
Subsidiary which entitle the holder thereof to acquire Common Stock at any
time, including, without limitation, any debt, preferred stock, rights,
options, warrants or other instrument that is at any time exercisable or
convertible into or exchangeable for, or otherwise entitles the holder thereof
to receive, Common Stock or other securities that entitle the holder to
receive, directly or indirectly, Common Stock.


 


“Company
Counsel” means Kane Russell Coleman & Logan PC.


 


“Disclosure
Materials” has the meaning set forth in Section 3.1(h).


 


“Disclosure
Schedules” has the meaning set forth in Article III.


 


“Discussion
Time” has the meaning set forth in Section 3.2(f).


 


“Evaluation
Date” has the meaning set forth in Section 3.1(q).


 


“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.


 


“GAAP”
means U.S. generally accepted accounting principles.


 


“Intellectual
Property Rights” has the meaning set forth in Section 3.1(n).


 


“Investment
Amount” means, as to each Investor, the aggregate amount to be
paid for the Shares and Warrants purchased hereunder as specified next to such
Investor’s name on the signature page of this Agreement and below the
heading “Investment Amount,” in United States Dollars and in immediately
available funds.


 


“Investor”
has the meaning set forth in the Preamble of this Agreement


 


“Investor
Party” has the meaning set forth in Section 4.11.


 


“Legend
Removal Date” has the meaning set forth in Section 4.1(c).


 


“Lien”
means any lien, charge, encumbrance, security interest, right of first refusal
or other restrictions of any kind.


 


“Material
Adverse Effect” means any of (i) a material and adverse
effect on the legality, validity or enforceability of any Transaction Document,
(ii) a material and adverse effect on the results of operations, assets,
business or condition (financial or otherwise) of the


 


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Company
and the Subsidiaries, taken as a whole, or (iii) an adverse impairment to
the Company’s ability to perform on a timely basis its obligations under any
Transaction Document.


 


“New
York Courts” means the state and federal courts sitting in the
City of New York, Borough of Manhattan.


 


“Per
Share Purchase Price” equals $0.30 per share


 


“Person”
means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.


 


“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.


 


“Rule 144” means Rule 144
promulgated by the Commission pursuant to the Securities Act, as such Rule may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission having substantially the same effect as such Rule.


 


“SEC
Reports” has the meaning set forth in Section 3.1(h).


 


“Securities”
means the Shares, the Warrants and the Warrant Shares.


 


“Securities
Act” has the meaning set forth in the Preamble.


 


“Shares”
means $1 million worth of the shares of Common Stock issued or issuable to the
Investors pursuant to this Agreement.


 


“Short
Sales” include, without limitation, all “short sales” as defined
in Rule 200 promulgated under Regulation SHO under the Exchange Act and
all types of direct and indirect stock pledges, forward sale contracts,
options, puts, calls, swaps and similar arrangements (including on a total
return basis), and sales and other transactions through non-US broker dealers
or foreign regulated brokers.


 


“Subsidiary”
means any “significant subsidiary”, as defined in Rule 1-02(w) of the
Regulation S-X promulgated by the Commission under the Exchange Act, of the
Company.


 


“Trading
Day” means (i) a day on which the Common Stock is traded on
a Trading Market (other than the OTC Bulletin Board), or (ii) if the
Common Stock is not listed on a Trading Market (other than the OTC Bulletin
Board), a day on which the Common Stock is traded in the over-the-counter
market, as reported by the OTC Bulletin Board, or (iii) if the Common
Stock is not quoted on any Trading Market, a day on which the Common Stock is
quoted in the over-the-counter market as reported by the National Quotation
Bureau Incorporated (or any similar organization or agency succeeding to its
functions of reporting prices); provided, that in the event that the Common
Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof,
then Trading Day shall mean a Business Day.


 


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“Trading
Market” means whichever of the New York Stock Exchange, the
American Stock Exchange, the NASDAQ Global Market, the NASDAQ Capital Market or
OTC Bulletin Board on which the Common Stock is listed or quoted for trading on
the date in question.


 


“Transaction
Documents” means this Agreement, the Warrant, and any other
documents or agreements executed in connection with the transactions
contemplated hereunder.


 


“Warrants”
means collectively the Common Stock purchase warrants, in the form of Exhibit A
hereto, delivered to the Investors at the Closing in accordance with Section 2.2(a) hereof,
which Warrants shall be exercisable immediately and have a term of exercise
equal to five (5) years.


 


“Warrant
Shares” means the shares of Common Stock issuable upon exercise
of the Warrants.


 


ARTICLE II.

PURCHASE AND SALE


 


Section 2.1                                      Closing.  Subject to the terms and conditions set forth
in this Agreement, at the Closing (as defined below), the Company shall issue
and sell to each Investor, and each such Investor shall, severally and not
jointly, purchase from the Company, the Shares and Warrants representing such
Investor’s Investment Amount as set forth on Schedule A hereto, for aggregate
gross proceeds to the Company in the amount of One Million and No/100 Dollars
($1,000,000.00).  Each Investor shall
deliver to the Company via wire transfer or a certified check immediately
available funds equal to their Investment Amount and the Company shall deliver
to each Investor their respective Shares and Warrants as determined pursuant to
Section 2.2(a) and the other items set forth in Section 2.2
issuable at the Closing.  Upon
satisfaction of the conditions set forth in Sections 2.3 and 2.4,
the Closing shall occur at the offices of Kane Russell Coleman & Logan
PC, 3700 Thanksgiving Tower, 1601 Elm Street, Dallas, Texas 75201 or such other
location as the parties shall mutually agree (which time and place are
designated as the “Closing”).


 


Section 2.2                                      Closing Deliveries


 


(a)                                  At the Closing,
the Company shall deliver or cause to be delivered to each Investor the
following:


 


(i)                                     this Agreement
duly executed by the Company;


 


(ii)                                  a certificate
evidencing a number of Shares equal to such Investor’s Investment Amount
divided by the Per Share Purchase Price, registered in the name of such
Investor; and


 


(iii)                               a Warrant
registered in the name of such Investor to purchase up to a number of shares of
Common Stock equal to 50% of the number of Shares such Investor purchases under
this Agreement at the Closing, with an exercise price equal to $0.35 per share,
subject to adjustment therein.


 


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(b)                                 At the Closing,
each Investor shall deliver or cause to be delivered to the Company the
following:


 


(i)                                     this Agreement
duly executed by such Investor; and


 


(ii)                                  such Investor’s
Investment Amount, in United States dollars and in immediately available funds,
by check or by wire transfer to an account specified in writing by the Company
for such purpose.


 


Section 2.3                                      Closing Conditions.


 


(a)                                  The obligation
of each Investor to acquire Securities at the Closing is subject to the
satisfaction or waiver by such Investor, at or before the Closing, of each of
the following conditions:


 


(i)                                     the Company
shall have received commitments from Investors to purchase an amount of
Securities with an aggregate purchase price of $1 million;


 


(ii)                                  the accuracy in
all material respects on the Closing Date of the representations and warranties
of the Company contained herein;


 


(iii)                               all
obligations, covenants and agreements of the Company required to be performed
at or prior to the Closing Date shall have been performed;


 


(iv)                              the delivery by
the Company of the items set forth in Section 2.2(a) of this
Agreement; and


 


(v)                                 there shall
have been no Material Adverse Effect with respect to the Company since the date
hereof.


 


(b)                                 The obligation
of the Company to sell Securities at the Closing is subject to the satisfaction
or waiver by the Company, at or before the Closing, of each of the following
conditions:


 


(i)                                     the accuracy in
all material respects when made and on the Closing Date of the representations
and warranties of the Investors contained herein;


 


(ii)                                  all
obligations, covenants and agreements of the Investors required to be performed
at or prior to the Closing shall have been performed; and


 


(iii)                               the delivery by
the Investors of the items set forth in Section 2.2(b) of this
Agreement.


 


ARTICLE III.

REPRESENTATIONS AND WARRANTIES


 


Section 3.1                                      Representations
and Warranties of the Company.  Except as set forth under the corresponding
section of the disclosure schedules delivered to the Investors


 


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concurrently herewith (the “Disclosure Schedules”), which
Disclosure Schedules shall be deemed a part hereof, the Company hereby makes
the following representations and warranties to each Investor:


 


(a)                                  Subsidiaries.  The Company has no direct or indirect
Subsidiaries other than as specified in the SEC Reports.  The Company owns, directly or indirectly, all
of the capital stock of each Subsidiary free and clear of any and all Liens,
and all the issued and outstanding shares of capital stock of each Subsidiary
are validly issued and are fully paid, non-assessable and free of preemptive
and similar rights.  Other than as
specified in the SEC Reports, neither the Company nor any Subsidiary is party
to any material joint venture or has any ownership interest in any entity that
is material to the Company.


 


(b)                                 Organization
and Qualification.  The Company
and each Subsidiary are duly incorporated or otherwise organized and validly
existing under the laws of the jurisdiction of its incorporation or
organization (as applicable), with the requisite power and authority to own and
use its properties and assets and to carry on its business as currently
conducted.  Neither the Company nor any
Subsidiary is in violation of any of the material provisions of its respective
certificate or articles of incorporation, bylaws or other organizational or
charter documents.  The Company and each
Subsidiary are duly qualified to conduct its respective businesses and are in
good standing as a foreign corporation or other entity in each jurisdiction in
which the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good
standing, as the case may be, could not, individually or in the aggregate, have
or reasonably be expected to result in a Material Adverse Effect.


 


(c)                                  Authorization;
Enforcement.  The Company
has the requisite corporate power and authority to enter into and to consummate
the transactions contemplated by each of the Transaction Documents and
otherwise to carry out its obligations thereunder.  The execution and delivery of each of the
Transaction Documents by the Company and the consummation by it of the
transactions contemplated thereby have been duly authorized by all necessary
action on the part of the Company and no further action is required by the
Company in connection therewith.  Each
Transaction Document has been (or upon delivery will have been) duly executed
by the Company and, when delivered in accordance with the terms hereof, will
constitute the valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, except (i) as limited by general
equitable principles and applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of
creditors’ rights generally, (ii) as limited by laws relating to the
availability of specific performance, injunctive relief or other equitable
remedies, and (iii) insofar as indemnification and contribution provisions
may be limited by applicable law.


 


(d)                                 No Conflicts.  Except as otherwise disclosed on Schedule
3.1(d), the execution, delivery and performance of the Transaction Documents by
the Company and the consummation by the Company of the transactions
contemplated thereby do not and will not (i) conflict with or violate any
provision of the Company’s or any Subsidiary’s certificate or articles of
incorporation, bylaws or other organizational or charter documents, or (ii) conflict
with, or constitute a default (or an event that with notice or lapse of time or
both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation (with


 


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or
without notice, lapse of time or both) of, any agreement, credit facility, debt
or other instrument (evidencing a Company or Subsidiary debt or otherwise) to
which the Company or any Subsidiary is a party or by which any property or
asset of the Company or any Subsidiary is bound, or (iii) result in a
violation of any law, rule, regulation, order, judgment, injunction, decree or
other restriction of any court or governmental authority to which the Company
or a Subsidiary is subject (including federal and state securities laws and
regulations), or by which any property or asset of the Company or any
Subsidiary is bound or affected; except in the case of each of clauses (ii) and
(iii), such as could not, individually or in the aggregate, have or reasonably
be expected to result in a Material Adverse Effect.


 


(e)                                  Filings,
Consents and Approvals.  The
Company is not required to obtain any consent, waiver, authorization or order
of, give any notice to, or make any filing or registration with, any court or
other federal, state, local or other governmental authority or other Person in
connection with the execution, delivery and performance by the Company of the
Transaction Documents, other than (i) the filing with the Commission of
one or more Registration Statements in accordance with the requirements of the
Registration Rights Agreement, (ii) filings required by state securities
laws, (iii) the filing of a Notice of Sale of Securities on Form D
with the Commission under Regulation D of the Securities Act, (iv) the
filings required in accordance with Sections 4.6 and 4.15, (v) such
consents or waivers as may be required under registration rights agreements
entered into in connection with business acquisitions effected prior to the
date of this Agreement, (vi) the filing of any requisite notices with the
Trading Market, and (vii) those that have been made or obtained prior to
the date of this Agreement.


 


(f)                                    Issuance of the
Securities.  The
Securities have been duly authorized and, when issued and paid for in
accordance with the Transaction Documents, will be duly and validly issued,
fully paid and nonassessable, free and clear of all Liens.  The Company has reserved from its duly
authorized capital stock the Shares issuable pursuant to this Agreement.


 


(g)                                 Capitalization.  The number of shares and type of all
authorized, issued and outstanding capital stock of the Company, and all shares
of Common Stock reserved for issuance under the Company’s various option and
incentive plans as of March 31, 2008, is accurately set forth in the SEC
Reports.  Except as specified in the SEC
Reports, no securities of the Company are entitled to preemptive or similar
rights.  No Person has any right of first
refusal, preemptive right, right of participation, or any similar right to
participate in the transactions contemplated by the Transaction Documents.  Except as specified in the SEC Reports, and
other than stock options granted pursuant to the Company’s stock option plans
following March 31, 2008, there are no outstanding options, warrants,
scrip rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities, rights or obligations convertible into or
exchangeable for, or giving any Person any right to subscribe for or acquire,
any shares of Common Stock, or contracts, commitments, understandings or
arrangements by which the Company or any Subsidiary is or may become bound to
issue additional shares of Common Stock, or securities or rights convertible or
exchangeable into shares of Common Stock. 
The issue and sale of the Securities will not, immediately or with the
passage of time, obligate the Company to issue shares of Common Stock or other
securities to any Person (other than the Investors) and will not result in a
right of any holder of Company securities to adjust the exercise, conversion,
exchange or reset price under such securities.


 


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(h)                                 SEC Reports;
Financial Statements.  The Company
has filed all reports, forms and schedules required to be filed by it under the
Securities Act and the Exchange Act, including pursuant to Section 13(a) or
15(d) thereof, for the twelve months preceding the date hereof (or
such shorter period as the Company was required by law to file such reports)
(the foregoing materials being collectively referred to herein as the “SEC Reports” and, together with the
Schedules to this Agreement (if any), the “Disclosure Materials”)
on a timely basis or has timely filed a valid extension of such time of filing
and has filed any such SEC Reports prior to the expiration of any such
extension.  The SEC Reports, as amended,
when filed, complied in all material respects with the requirements of the
Securities Act and the Exchange Act and the rules and regulations of the
Commission promulgated thereunder, and none of the SEC Reports, as amended,
when filed, contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they
were made, not misleading.  The financial
statements of the Company included in the SEC Reports, as amended, comply in
all material respects with applicable accounting requirements and the rules and
regulations of the Commission with respect thereto as in effect at the time of
filing.  Such financial statements have
been prepared in accordance with GAAP applied on a consistent basis during the
periods involved, except as may be otherwise specified in such financial
statements or the notes thereto, and fairly present in all material respects
the financial position of the Company and its consolidated Subsidiaries as of
and for the dates thereof and the results of operations and cash flows for the
periods then ended, subject, in the case of unaudited statements, to normal,
year-end audit adjustments.


 


(i)                                     Material
Changes.  Since the date of the latest
audited financial statements included within the SEC Reports, except as specifically
disclosed in the SEC Reports, (i) there has been no event, occurrence or
development that has had or that could reasonably be expected to result in a
Material Adverse Effect, (ii) the Company has not incurred any liabilities
(contingent or otherwise) other than (A) trade payables, accrued expenses
and other liabilities incurred in the ordinary course of business consistent
with past practice and (B) liabilities not required to be reflected in the
Company’s financial statements pursuant to GAAP or required to be disclosed in
filings made with the Commission, (iii) the Company has not altered its
method of accounting or the identity of its auditors, (iv) the Company has
not declared or made any dividend or distribution of cash or other property to
its stockholders or purchased, redeemed or made any agreements to purchase or
redeem any shares of its capital stock (other than in connection with
repurchases of unvested stock issued to employees of the Company), and (v) the
Company has not issued any equity securities to any officer, director or
Affiliate, except pursuant to existing Company stock option plans.


 


(j)                                     Litigation.  There is no Action which (i) adversely
affects or challenges the legality, validity or enforceability of any of the
Transaction Documents or the Securities or (ii) except as specifically
disclosed in the SEC Reports, could, if there were an unfavorable decision,
individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect.  Neither the
Company nor any Subsidiary, nor any director or officer thereof (in his or her
capacity as such), is or has been the subject of any Action involving a claim
of violation of or liability under federal or state securities laws or a claim
of breach of fiduciary duty, except as specifically disclosed in the SEC
Reports.  During the past twelve (12)
months preceding the date hereof there has not been, and to the knowledge of
the Company, there is no


 


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pending
any investigation by the Commission involving the Company or any current or
former director or officer of the Company (in his or her capacity as
such).  The Commission has not issued any
stop order or other order suspending the effectiveness of any registration statement
filed by the Company or any Subsidiary under the Exchange Act or the Securities
Act.


 


(k)                                  Compliance.  Neither the Company nor any Subsidiary (i) is
in default under or in violation of (and no event has occurred that has not
been waived that, with notice or lapse of time or both, would result in a
default by the Company or any Subsidiary under), nor has the Company or any
Subsidiary received notice of a claim that it is in default under or that it is
in violation of, any indenture, loan or credit agreement or any other agreement
or instrument to which it is a party or by which it or any of its properties is
bound (whether or not such default or violation has been waived), (ii) is
in violation of, or in receipt of notice that it is in violation of, any order
of any court, arbitrator or governmental body, or (iii) is or has been in
violation of, or in receipt of notice that it is in violation of, any statute, rule or
regulation of any governmental authority, including without limitation all
foreign, federal, state and local laws relating to taxes, environmental
protection, occupational health and safety, product quality and safety,
employment and labor matters and, to its knowledge, privacy, except in each
case as could not, individually or in the aggregate, have or reasonably be
expected to result in a Material Adverse Effect.  The Company is in compliance with all
effective requirements of the Sarbanes-Oxley Act of 2002, as amended, and the rules and
regulations thereunder, that are applicable to it, except where such
noncompliance could not have or reasonably be expected to result in a Material
Adverse Effect.


 


(l)                                     Regulatory
Permits.  The Company and the
Subsidiaries possess all certificates, authorizations and permits issued by the
appropriate federal, state, local or foreign regulatory authorities necessary
to conduct their respective businesses as described in the SEC Reports, except
where the failure to possess such permits could not, individually or in the
aggregate, have or reasonably be expected to result in a Material Adverse
Effect, and neither the Company nor any Subsidiary has received any notice of
proceedings relating to the revocation or modification of any such permits.


 


(m)                               Title to Assets.  The Company and the Subsidiaries have good
and marketable title in fee simple to all real property owned by them that is
material to their respective businesses and good and marketable title in all
personal property owned by them that is material to their respective
businesses, in each case free and clear of all Liens, except for Liens as do
not materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property by the
Company and the Subsidiaries.  Any real
property and facilities held under lease by the Company and the Subsidiaries
are held by them under leases valid, subsisting and enforceable against the
Company and the Subsidiaries, and the Company and the Subsidiaries are in
compliance with such leases, except as could not, individually or in the
aggregate, have or reasonably be expected to result in a Material Adverse
Effect.


 


(n)                                 Patents and
Trademarks.  The Company
and the Subsidiaries have, or have rights to use, all patents, patent
applications, trademarks, trademark applications, service marks, trade names,
copyrights, licenses and other similar rights that are necessary or material
for use in connection with their respective businesses as described in the SEC
Reports and which the 


 


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failure
to so have could, individually or in the aggregate, have or reasonably be
expected to result in a Material Adverse Effect (collectively, the “Intellectual Property Rights”).  Neither the Company nor any Subsidiary has
received a written notice that the Intellectual Property Rights used by the
Company or any Subsidiary violates or infringes upon the rights of any Person
and the Company has no knowledge of any such violation or infringement.  Except as set forth in the SEC Reports, to
the knowledge of the Company, all such Intellectual Property Rights are
enforceable.


 


(o)                                 Insurance.  The Company and the Subsidiaries are insured
by insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary for enterprises of
similar size and stage of development in the businesses in which the Company
and the Subsidiaries are engaged.  The
Company has no reason to believe that it will not be able to renew its and the
Subsidiaries’ existing insurance coverage as and when such coverage expires or
to obtain similar coverage from similar insurers as may be necessary to
continue its business on terms consistent with market for the Company’s and
such Subsidiaries’ respective lines of business.


 


(p)                                 Transactions
With Affiliates and Employees.  Except as set forth in the SEC Reports, none
of the officers or directors of the Company and, to the knowledge of the
Company, none of the employees of the Company is presently a party to any
transaction with the Company or any Subsidiary required to be disclosed in the
SEC Reports (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company, any entity in
which any officer, director, or any such employee has a substantial interest or
is an officer, director, trustee or partner.


 


(q)                                 Internal
Accounting Controls.  The Company
and the Subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management’s general or specific authorizations, (ii) transactions
are recorded as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management’s general or specific
authorization, and (iv) the recorded accountability for assets is compared
with the existing assets at reasonable intervals and appropriate action is
taken with respect to any differences. 
The Company has established disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
Company and designed such disclosure controls and procedures to ensure that
material information relating to the Company, including its Subsidiaries, is
made known to the certifying officers by others within those entities.  The Company’s certifying officers have
evaluated the effectiveness of the Company’s controls and procedures in
accordance with Item 307 of Regulation S-K under the Exchange Act for the
Company’s fiscal quarter ended March 31, 2008 (such date, the “Evaluation Date”).  The Company presented in its most recently
filed Form 10-Q the conclusions of the certifying officers about the
effectiveness of the disclosure controls and procedures based on their
evaluations as of the Evaluation Date. 
Since the Evaluation Date, there have been no significant changes in the
Company’s internal controls (as such term is defined in Item 308 of Regulation
S-K under the Exchange Act) or, to the Company’s 


 


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knowledge,
in other factors that could significantly affect the Company’s internal
controls which was required to be disclosed in the SEC Reports and was not so
disclosed.


 


(r)                                    Certain Fees.  No agent or broker will receive brokerage or
finder fees or commissions payable by the Company with respect to the
transactions contemplated by this Agreement. 
The Investors shall have no obligation with respect to any fees or with
respect to any claims (other than such fees or commissions owed by an Investor
pursuant to written agreements executed by such Investor which fees or
commissions shall be the sole responsibility of such Investor) made by or on
behalf of other Persons for fees of a type contemplated in this Section that
may be due in connection with the transactions contemplated by this Agreement.


 


(s)                                  Certain
Registration Matters.  Assuming
the accuracy of the Investors’ representations and warranties set forth in Section 3.2,
no registration under the Securities Act is required for the offer and sale of
the Shares and Warrants by the Company to the Investors under the Transaction
Documents.


 


(t)                                    Listing and
Maintenance Requirements. 
Except as specified in the SEC Reports, the Company has not, in the two
years preceding the date hereof, received notice from any Trading Market to the
effect that the Company is not in compliance with the listing or maintenance
requirements thereof.  The Company is,
and has no reason to believe that it will not in the foreseeable future
continue to be, in compliance with the listing and maintenance requirements for
continued listing of the Common Stock on the Trading Market on which the Common
Stock is currently listed or quoted.  The
issuance and sale of the Securities under the Transaction Documents does not
contravene the rules and regulations of the Trading Market on which the
Common Stock is currently listed or quoted, and no approval of the shareholders
of the Company thereunder is required for the Company to issue and deliver to
the Investors the Securities contemplated by Transaction Documents.


 


(u)                                 Investment
Company.  The Company is not, and is not
an Affiliate of, and immediately following the Closing will not have become, an
“investment company” within the meaning of the Investment Company Act of 1940,
as amended.


 


(v)                                 Application of
Takeover Protections.  The Company
has taken all necessary action, if any, in order to render inapplicable any
control share acquisition, business combination, poison pill (including any distribution
under a rights agreement) or other similar anti-takeover provision under the
Company’s Certificate of Incorporation (or similar charter documents) or the
laws of its state of incorporation that is or could become applicable to the
Investors as a result of the Investors and the Company fulfilling their
obligations or exercising their rights under the Transaction Documents,
including without limitation the Company’s issuance of the Securities and the
Investors’ ownership of the Securities.


 


(w)                               No Additional
Agreements.  The Company
does not have any agreement or understanding with any Investor with respect to
the transactions contemplated by the Transaction Documents other than as
specified in the Transaction Documents.


 


(x)                                   Disclosure.  The Company confirms that neither it nor any
Person acting on its behalf has provided any Investor or its respective agents
or counsel with any information


 


11

















 


that
the Company believes constitutes material, non-public information except
insofar as the existence and terms of the proposed transactions hereunder may
constitute such information.  The Company
understands and confirms that the Investors will rely on the foregoing representations
and covenants in effecting transactions in securities of the Company.  All disclosure provided to the Investors
regarding the Company, its business and the transactions contemplated hereby,
furnished by or on behalf of the Company (including the Company’s
representations and warranties set forth in this Agreement) are true and
correct and do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements made therein,
in light of the circumstances under which they were made, not misleading.


 


(y)                                 Insolvency.  The Company is not as of the date hereof, and
after giving effect to the transactions contemplated hereby to occur at the
Closing will not, be Insolvent.  For
purposes of this Agreement, “Insolvent” shall mean, with respect to any Person,
that (i) such Person is unable to pay its debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities become
absolute and matured or (ii) such Person intends to incur or believes that
it will incur debts that would be beyond its ability to pay as such debts
mature.


 


(z)                                   Transfer Taxes.  On the Closing Date, all stock transfer or
other taxes (other than income or similar taxes) which are required to be paid
in connection with the sale and transfer of the Securities to be sold to each
Investor hereunder will be, or will have been, fully paid or provided for by
the Company, and all laws imposing such taxes will be or will have been
complied with by the Company, except where such noncompliance could not have or
reasonably be expected to result in a Material Adverse Effect.


 


(aa)                            Tax Status.  The Company and each of its Subsidiaries (i) has
made or filed all foreign, federal and state income and all other tax returns,
reports and declarations required by any jurisdiction to which it is subject, (ii) has
paid all taxes and other governmental assessments and charges that are material
in amount, shown or determined to be due on such returns, reports and
declarations, except those being contested in good faith and (iii) has set
aside on its books provision reasonably adequate for the payment of all taxes
for periods subsequent to the periods to which such returns, reports or
declarations apply, except where the failure to do so could not have or
reasonably be expected to result in a Material Adverse Effect.  There are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any jurisdiction, and the
officers of the Company know of no basis for any such claim.


 


(bb)                          Undisclosed
Liabilities.  No event,
liability, development or circumstance has occurred or exists with respect to
the Company or its business, properties, prospects, operations or financial
condition that would be required to be disclosed by the Company under the
Securities Act and the Exchange Act and the rules and regulations of the
Commission promulgated thereunder relating to an issuance and sale by the
Company of its securities and which has not been reported in accordance with
such rules and regulations of the Commission.


 


(cc)                            Employee
Relations.  Neither the
Company nor any of its Subsidiaries is a party to any collective bargaining
agreement or employs any member of a union. 
The Company and its Subsidiaries believe that their relations with their
employees are good.  No executive officer
of the Company or any of its Subsidiaries (as defined in Rule 501(f) of
the Securities Act)


 


12

















 


has
notified the Company or any such Subsidiary that such officer intends to leave
the Company or any such Subsidiary or otherwise terminate such officer’s
employment with the Company or any such Subsidiary.  No executive officer of the Company or any of
its Subsidiaries, to the knowledge of the Company or any such Subsidiary, is
now, or expects to be, in violation of any material term of any employment
contract, confidentiality, disclosure or proprietary information agreement,
non-competition agreement, or any other contract, agreement or any restrictive
covenant, and the continued employment of each such executive officer does not
subject the Company or any such Subsidiary to any liability with respect to any
of the foregoing matters.  The Company
and its Subsidiaries are in compliance with all federal, state and local laws
and regulations respecting labor, employment and employment practices and
benefits, terms and conditions of employment and wages and hours, except where
failure to be in compliance would not, either individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect.  There are no complaints or charges against
the Company or its Subsidiaries pending or, to the knowledge of the Company and
its Subsidiaries, threatened to be filed with any governmental authority or arbitrator
based on, arising out of, in connection with, or otherwise relating to the
employment or termination of employment by the Company or its Subsidiaries of
any individual that would be reasonably likely to result in a Material Adverse
Effect.


 


(dd)                          Subsidiary
Rights.  The Company or one or more of
its Subsidiaries have the unrestricted right to vote, and (subject to
limitations imposed by applicable law) to receive dividends and distributions
on, all capital securities of its Subsidiaries as owned by the Company or such
Subsidiaries.


 


(ee)                            Off Balance
Sheet Arrangements.  There is no
transaction, arrangement, or other relationship between the Company and an
unconsolidated or other off balance sheet entity that is required to be
disclosed by the Company in its SEC Reports and is not so disclosed or that
otherwise would be reasonably likely to have a Material Adverse Effect.


 


Section 3.2                                      Representations
and Warranties of the Investors.  Each Investor hereby, for itself and for no
other Investor, represents and warrants to the Company as follows:


 


(a)                                  Organization;
Authority.  Such
Investor is an entity duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization with full right,
corporate or partnership power and authority to enter into and to consummate
the transactions contemplated by the Transaction Documents and otherwise to
carry out its obligations hereunder and thereunder.  The execution, delivery and performance by
such Investor of the transactions contemplated by this Agreement have been duly
authorized by all necessary corporate or similar action on the part of such
Investor.  Each Transaction Document to
which it is a party has been duly executed by such Investor, and when delivered
by such Investor in accordance with the terms hereof, will constitute the valid
and legally binding obligation of such Investor, enforceable against it in
accordance with its terms, except (i) as limited by general equitable
principles and applicable bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting enforcement of creditors’
rights generally, (ii) as limited by laws relating to the availability of
specific performance, injunctive relief or other equitable remedies and (iii) insofar
as indemnification and contribution provisions may be limited by applicable
law.


 


13

















 


(b)                                 Own Account.  Such Investor understands that the Securities
are “restricted securities” and have not been registered under the Securities
Act or any applicable state securities law and is acquiring the Securities as
principal for its own account and not with a view to or for distributing or
reselling such Securities or any part thereof in violation of the Securities
Act or any applicable state securities law, has no present intention of
distributing any of such Securities in violation of the Securities Act or any
applicable state securities law, and has no arrangement or understanding with
any other Persons regarding the distribution of such Securities in violation of
the Securities Act or any applicable state securities law (this representation
and warranty not limiting such Investor’s right to sell the Securities pursuant
to a registration statement or otherwise in compliance with applicable federal
and state securities laws).  Such
Investor is acquiring the Securities hereunder in the ordinary course of its
business.  Such Investor does not have
any agreement or understanding, directly or indirectly, with any Person to
distribute any of the Securities.


 


(c)                                  Investor Status.  At the time such Investor was offered the
Securities, it was, and on the date hereof it is, and on each date on which it
exercises any Warrants it will be either: (i) an “accredited investor” as
defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under
the Securities Act or (ii) a “qualified institutional buyer” as defined in
Rule 144A(a) under the Securities Act.  Such Investor is not required to be
registered as a broker-dealer under Section 15 of the Exchange Act.


 


(d)                                 Experience of
Such Investor.  Such
Investor, either alone or together with its representatives, has such
knowledge, sophistication and experience in business and financial matters so
as to be capable of evaluating the merits and risks of the prospective investment
in the Securities, and has so evaluated the merits and risks of such
investment.  Such Investor is able to
bear the economic risk of an investment in the Securities and, at the present
time, is able to afford a complete loss of such investment.


 


(e)                                  General
Solicitation.  Such
Investor is not purchasing the Securities as a result of any advertisement,
article, notice or other communication regarding the Securities published in
any newspaper, magazine or similar media or broadcast over television or radio
or presented at any seminar or any other general solicitation or general
advertisement.


 


(f)                                    Short Sales and
Confidentiality Prior To The Date Hereof.  Other than the transactions contemplated
hereunder, such Investor has not directly or indirectly, nor has any Person
acting on behalf of or pursuant to any understanding with such Investor,
executed any disposition, including Short Sales, in the securities of the
Company during the period commencing from the time that such Investor first
received a term sheet from the Company or any other Person setting forth the
material terms of the transactions contemplated hereunder until the date hereof
(“Discussion Time”).  Notwithstanding the foregoing, in the case of
an Investor that is a multi-managed investment vehicle whereby separate
portfolio managers manage separate portions of such Investor’s assets and the
portfolio managers have no direct knowledge of the investment decisions made by
the portfolio managers managing other portions of such Investor’s assets, the
representation set forth above shall only apply with respect to the portion of
assets managed by the portfolio manager that made the investment decision to
purchase the Securities covered by this Agreement.  Other than to other Persons party to this Agreement,
such


 


14

















 


Investor
has maintained the confidentiality of all disclosures made to it in connection
with the transactions contemplated hereunder (including the existence and terms
of such transactions).


 


The Company acknowledges and
agrees that no Investor has made or makes any representations or warranties
with respect to the transactions contemplated hereby other than those
specifically set forth in this Section 3.2.


 


ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES


 


Section 4.1                                      Transfer Restrictions.


 


(a)                                  The Securities
may only be disposed of in compliance with state and federal securities
laws.  In connection with any transfer of
Securities other than pursuant to an effective registration statement or Rule 144,
to the Company or to an Affiliate of an Investor or in connection with a pledge
as contemplated in Section 4.1(b), the Company may require the
transferor thereof to provide to the Company an opinion of counsel selected by
the transferor and reasonably acceptable to the Company, the form and substance
of which opinion shall be reasonably satisfactory to the Company, to the effect
that such transfer does not require registration of such transferred Securities
under the Securities Act.  As a condition
of transfer, any such transferee shall agree in writing to be bound by the
terms of this Agreement shall have the rights of an Investor under this
Agreement.


 


(b)                                 The Investors
agree to the imprinting, so long as is required by this Section 4.1(b),
of a legend on any of the Securities in the following form:


 


NEITHER THESE SECURITIES NOR
THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED
WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY
STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.  THESE SECURITIES AND THE SECURITIES ISSUABLE
UPON EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA
FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.


 


The Company acknowledges and
agrees that an Investor may from time to time pledge pursuant to a bona fide
margin agreement with a registered broker-dealer or grant a security interest
in some or all of the Securities to a financial institution that is an “accredited
investor” as defined in Rule 501(a) under the Securities Act and who
agrees to be bound by the provisions of this Agreement and, if required under
the terms of such arrangement, such Investor may transfer pledged or secured
Securities to the pledgees or secured parties. 
Such a pledge or transfer would


 


15

















 


not
be subject to approval of the Company and no legal opinion of legal counsel of
the pledgee, secured party or pledgor shall be required in connection
therewith.  Further, no notice shall be
required of such pledge.  At the appropriate
Investor’s expense, the Company will execute and deliver such reasonable
documentation as a pledgee or secured party of Securities may reasonably
request in connection with a pledge or transfer of the Securities.


 


(c)                                  Certificates
evidencing the Warrant Shares shall not contain any legend (including the
legend set forth in Section 4.1(b) hereof): (i) while a
registration statement covering the resale of such security is effective under
the Securities Act, or (ii) following any sale of such Warrant Shares
pursuant to Rule 144, or (iii) if such Warrant Shares are eligible for
sale under Rule 144, or (iv) if such legend is not required under
applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the staff of the Commission).  The Company agrees that at such time as such
legend is no longer required under this Section 4.1(c), it will
promptly cause its counsel to issue a legal opinion to the Company’s transfer
agent if required by the Company’s transfer agent to effect the removal of the
legend hereunder.  If all or any portion
of a Warrant is exercised at a time when there is an effective registration
statement to cover the resale of the Warrant Shares, or if such Warrant Shares
may be sold under Rule 144 or if such legend is not otherwise required
under applicable requirements of the Securities Act (including judicial
interpretations thereof, then such Warrant Shares shall be issued free of all
legends.  The Company agrees that at such
time as such legend is no longer required under this Section 4.1(c),
it will, no later than ten Trading Days following the delivery by an Investor
to the Company or the Company’s transfer agent of a certificate representing
the Warrant Shares issued with a restrictive legend (such tenth Trading Day,
the “Legend Removal Date”),
deliver or cause to be delivered to such Investor a certificate representing
such shares that is free from all restrictive and other legends.  The Company may not make any notation on its
records or give instructions to any transfer agent of the Company that enlarge
the restrictions on transfer set forth in this Section.  Certificates for Securities subject to legend
removal hereunder shall be transmitted by the transfer agent of the Company to
the Investors by crediting the account of the Investor’s prime broker with the Depository
Trust Company System.


 


(d)                                 Each Investor,
severally and not jointly with the other Investors, agrees that the removal of
the restrictive legend from certificates representing Securities as set forth
in this Section 4.1 is predicated upon the Company’s reliance that
the Investor will sell any Securities pursuant to either the registration
requirements of the Securities Act, including any applicable prospectus
delivery requirements, or an exemption therefrom.


 


Section 4.2                                      Acknowledgment
of Dilution.  The Company
acknowledges that the issuance of the Securities may result in dilution of the
outstanding shares of Common Stock, which dilution may be substantial under
certain market conditions.  The Company
further acknowledges that its obligations under the Transaction Documents,
including without limitation its obligation to issue the Warrant Shares
pursuant to the Transaction Documents, are unconditional and absolute and not
subject to any right of set off, counterclaim, delay or reduction, regardless
of the effect of any such dilution or any claim the Company may have against
any Investor and regardless of the dilutive effect that such issuance may have
on the ownership of the other stockholders of the Company.


 


16
















 


Section 4.3                                      Furnishing of
Information.  As long as
any Investor owns Securities, the Company covenants to timely file (or obtain
extensions in respect thereof and file within the applicable grace period) all
reports required to be filed by the Company after the date hereof pursuant to
the Exchange Act.  As long as any
Investor owns Securities, if the Company is not required to file reports
pursuant to the Exchange Act, it will prepare and furnish to the Investors and
make publicly available in accordance with Rule 144 such information as is
required for the Investors to sell the Securities under Rule 144.  The Company further covenants that it will
take such further action as any holder of Securities may reasonably request,
all to the extent required from time to time to enable such Person to sell such
Securities without registration under the Securities Act within the limitation
of the exemptions provided by Rule 144.


 


Section 4.4                                      Integration.  The Company shall not sell, offer for sale or
solicit offers to buy or otherwise negotiate in respect of any security (as
defined in Section 2 of the Securities Act) that would be
integrated with the offer or sale of the Securities in a manner that would
require the registration under the Securities Act of the sale of the Securities
to the Investors or that would be integrated with the offer or sale of the
Securities for purposes of the rules and regulations of any Trading
Market.


 


Section 4.5                                      Exercise
Procedures.  The form of
Notice of Exercise included in the Warrants sets forth the totality of the
procedures required of the Investors in order to exercise the Warrants.  No additional legal opinion or other
information or instructions shall be required of the Investors to exercise
their Warrants.  The Company shall honor
exercises of the Warrants and shall deliver Warrant Shares in accordance with
the terms, conditions and time periods set forth in the Transaction Documents.


 


Section 4.6                                      Securities Laws
Disclosure; Publicity.  The
Company shall, by 8:30 a.m. Eastern time on the third Trading Day
following the date hereof, issue a Current Report on Form 8-K, reasonably
acceptable to each Investor disclosing the material terms of the transactions
contemplated hereby, and shall attach the Transaction Documents thereto.  The Company and each Investor shall consult
with each other in issuing any other press releases with respect to the
transactions contemplated hereby, and neither the Company nor any Investor
shall issue any such press release or otherwise make any such public statement
without the prior consent of the Company, with respect to any press release of
any Investor, or without the prior consent of each Investor, with respect to
any press release of the Company, which consent shall not unreasonably be
withheld, except if such disclosure is required by law, in which case the
disclosing party shall promptly provide the other party with prior notice of
such public statement or communication. 
Notwithstanding the foregoing, the Company shall not publicly disclose
the name of any Investor, or include the name of any Investor in any filing
with the Commission or any regulatory agency or Trading Market, without the
prior written consent of such Investor, except (i) as required by federal
securities law in connection with a registration statement and (ii) to the
extent such disclosure is required by law or Trading Market regulations, in
which case the Company shall provide the Investors with prior notice of such
disclosure permitted under subclause (i) or (ii).


 


Section 4.7                                      Shareholder
Rights Plan.  No claim
will be made or enforced by the Company or, to the knowledge of the Company,
any other Person that any Investor is an “Acquiring Person” under any
shareholder rights plan or similar plan or arrangement in effect or


 


17

















 


hereafter adopted by the
Company, or that any Investor could be deemed to trigger the provisions of any
such plan or arrangement, by virtue of receiving Securities under the
Transaction Documents or under any other agreement between the Company and the
Investors.  The Company shall conduct its
business in a manner so that it will not become subject to the Investment
Company Act.


 


Section 4.8                                      Non-Public
Information.  The Company
covenants and agrees that neither it nor any other Person acting on its behalf
will provide any Investor or its agents or counsel with any information that
the Company believes constitutes material non-public information, unless prior
thereto such Investor shall have executed a written agreement regarding the
confidentiality and use of such information. 
The Company understands and confirms that each Investor shall be relying
on the foregoing representations in effecting transactions in securities of the
Company.


 


Section 4.9                                      Use of Proceeds.  The Company shall use the net proceeds from
the sale of the Securities hereunder for acquisitions and for general working
capital purposes.


 


Section 4.10                                Reimbursement.  If any Investor becomes involved in any
capacity in any Proceeding by or against any Person who is a stockholder of the
Company (except as a result of sales, pledges, margin sales and similar
transactions by such Investor to or with any current stockholder), solely as a
result of such Investor’s acquisition of the Securities under this Agreement,
the Company will reimburse such Investor for its reasonable legal and other
expenses (including the cost of any investigation preparation and travel in
connection therewith) incurred in connection therewith, as such expenses are
incurred.  The reimbursement obligations
of the Company under this paragraph shall be in addition to any liability which
the Company may otherwise have, shall extend upon the same terms and conditions
to any Affiliates of the Investors who are actually named in such action,
proceeding or investigation, and partners, directors, agents, employees and
controlling persons (if any), as the case may be, of the Investors and any such
Affiliate, and shall be binding upon and inure to the benefit of any
successors, assigns, heirs and personal representatives of the Company, the
Investors and any such Affiliate and any such Person.  The Company also agrees that neither the
Investors nor any such Affiliates, partners, directors, agents, employees or
controlling persons shall have any liability to the Company or any Person
asserting claims on behalf of or in right of the Company solely as a result of
acquiring the Securities under this Agreement.


 


Section 4.11                                Indemnification
of Investors.  Subject to
the provisions of this Section 4.11, the Company will indemnify and
hold each Investor and its directors, officers, shareholders, members,
partners, employees and agents (and any other Persons with a functionally
equivalent role of a Person holding such titles notwithstanding a lack of such
title or any other title), each Person who controls such Investor (within the
meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act), and the directors, officers, agents, members, partners or
employees (and any other Persons with a functionally equivalent role of a
Person holding such titles notwithstanding a lack of such title or any other
title) of such controlling person (each, an “Investor
Party”) harmless from any and all losses, liabilities,
obligations, claims, contingencies, damages, costs and expenses, including all
judgments, amounts paid in settlements, court costs and reasonable attorneys’
fees and costs of investigation that any such Investor Party may suffer or
incur as a result of or relating to (a) any breach of any of the
representations, warranties, covenants or agreements made by the Company in
this Agreement or


 


18

















 


in the other Transaction
Documents or (b) any action instituted against an Investor, or any of them
or their respective Affiliates, by any stockholder of the Company who is not an
Affiliate of such Investor, with respect to any of the transactions
contemplated by the Transaction Documents (unless such action is based upon a
breach of such Investor’s representations, warranties or covenants under the
Transaction Documents or any agreements or understandings such Investor may
have with any such stockholder or any violations by the Investor of state or
federal securities laws or any conduct by such Investor which constitutes
fraud, gross negligence, willful misconduct or malfeasance).  If any action shall be brought against any
Investor Party in respect of which indemnity may be sought pursuant to this
Agreement, such Investor Party shall promptly notify the Company in writing,
and the Company shall have the right to assume the defense thereof with counsel
of its own choosing.  Any Investor Party
shall have the right to employ separate counsel in any such action and participate
in the defense thereof, but the fees and expenses of such counsel shall be at
the expense of such Investor Party except to the extent that (i) the
employment thereof has been specifically authorized by the Company in writing, (ii) the
Company has failed after a reasonable period of time to assume such defense and
to employ counsel or (iii) in such action there is, in the reasonable
opinion of such separate counsel, a material conflict on any material issue
between the position of the Company and the position of such Investor
Party.  The Company will not be liable to
any Investor Party under this Agreement (i) for any settlement by an
Investor Party effected without the Company’s prior written consent, which
shall not be unreasonably withheld or delayed; or (ii) to the extent, but
only to the extent that a loss, claim, damage or liability is attributable to
any Investor Party’s breach of any of the representations, warranties,
covenants or agreements made by the Investors in this Agreement or in the other
Transaction Documents.


 


Section 4.12                                Reservation and Listing of Securities.


 


(a)                                  The Company
shall maintain a reserve from its duly authorized shares of Common Stock for
issuance pursuant to the Transaction Documents in such amount as may be
required to fulfill its obligations in full under the Transaction Documents
(the “Required Minimum”).


 


(b)                                 If, on any
date, the number of authorized but unissued (and otherwise unreserved) shares
of Common Stock is less than the Required Minimum on such date, then the Board
of Directors of the Company shall use commercially reasonable efforts to amend
the Company’s certificate or articles of incorporation to increase the number
of authorized but unissued shares of Common Stock to at least the Required
Minimum at such time, as soon as possible and in any event not later than the
ninetieth (90th) day after such date.


 


(c)                                  The Company
shall, if applicable: (i) in the time and manner required by the Trading
Market, prepare and file with such Trading Market an additional shares listing
application covering a number of shares of Common Stock at least equal to the
Required Minimum on the date of such application, (ii) take all steps
necessary to cause such shares of Common Stock to be approved for listing on
the Trading Market as soon as possible thereafter, (iii) provide to the
Investors evidence of such listing, and (iv) maintain the listing of such
Common Stock on any date at least equal to the Required Minimum on such date on
such Trading Market or another Trading Market.


 


19

















 


Section 4.13                                Equal Treatment
of Investors.  No
consideration shall be offered or paid to any Person to amend or consent to a
waiver or modification of any provision of any of the Transaction Documents
unless the same consideration is also offered to all other parties to the
Transaction Documents.


 


Section 4.14                                Short Sales and
Confidentiality After The Date Hereof.  Each Investor severally and not jointly with
the other Investors covenants that neither it nor any Affiliates acting on its
behalf or pursuant to any understanding with it will execute any Short Sales
during the period after the Discussion Time and ending at the time that the
transactions contemplated by this Agreement are first publicly announced as
described in Section 4.6. 
Further, each Investor severally and not jointly with the other
Investors covenants that until such Investor does not hold any of the Warrants,
such Investor shall not create any “net short” position in the Company’s Common
Stock, whereby the Investor shall have engaged in a Short Sale which would make
such Investor’s short position greater than the number of shares of Common
Stock which such Investor could obtain by exercising its Warrants held at the
time of such determination.  Each
Investor, severally and not jointly with the other Investors, covenants that
until such time as the transactions contemplated by this Agreement are publicly
disclosed by the Company as described in Section 4.6, such Investor
will maintain, the confidentiality of all disclosures made to it in connection
with such transactions (including the existence and terms of such
transactions).  Each Investor understands
and acknowledges, severally and not jointly with any other Investor, that the
Commission currently takes the position that coverage of short sales of shares
of the Common Stock “against the box” prior to the date a registration
statement is first declared effective by the Commission is a violation of Section 5
of the Securities Act, as set forth in Item 65, Section 5 under Section A,
of the Manual of Publicly Available Telephone Interpretations, dated July 1997,
compiled by the Office of Chief Counsel, Division of Corporation Finance.  Notwithstanding the foregoing, no Investor
makes any representation, warranty or covenant hereby that it will not engage
in Short Sales in the securities of the Company after the time that the
transactions contemplated by this Agreement are first publicly announced as
described in Section 4.6. 
Notwithstanding the foregoing, in the case of an Investor that is a
multi-managed investment vehicle whereby separate portfolio managers manage
separate portions of such Investor’s assets and the portfolio managers have no
direct knowledge of the investment decisions made by the portfolio managers
managing other portions of such Investor’s assets, the covenant set forth above
shall only apply with respect to the portion of assets managed by the portfolio
manager that made the investment decision to purchase the Securities covered by
this Agreement.


 


Section 4.15                                Form D;
Blue Sky Filings.  The Company
agrees to timely file a Form D with respect to the Securities as required
under Regulation D and to provide a copy thereof, promptly upon request of any
Investor.  The Company shall, on or
before or after the Closing Date, take such action as the Company shall
reasonably determine is necessary in order to obtain an exemption for, or to
qualify the Securities for, sale to the Investors at the Closing under
applicable securities or “Blue Sky” laws of the states of the United States,
and shall provide evidence of such actions promptly upon request of any
Investor.


 


20

















 


ARTICLE V.

MISCELLANEOUS


 


Section 5.1                                      Fees and
Expenses.  Each party
shall pay the fees and expenses of its advisers, counsel, accountants and other
experts, if any, and all other expenses incurred by such party incident to the
negotiation, preparation, execution, delivery and performance of the
Transaction Documents.  The Company shall
pay all stamp and other taxes and duties levied in connection with the sale of
the Shares.


 


Section 5.2                                      Entire
Agreement.  The
Transaction Documents, together with the Exhibits and Schedules thereto,
contain the entire understanding of the parties with respect to the subject
matter hereof and supersede all prior agreements, understandings, discussions
and representations, oral or written, with respect to such matters, which the
parties acknowledge have been merged into such documents, exhibits and
schedules.


 


Section 5.3                                      Notices.  Any and all notices or other communications
or deliveries required or permitted to be provided hereunder shall be in
writing and shall be deemed given and effective on the earliest of (a) the
date of transmission, if such notice or communication is delivered via
facsimile (provided the sender receives a machine-generated confirmation of
successful transmission and reasonably promptly following such transmission
sends such notice or communication via U.S. mail or overnight courier) at the
facsimile number specified in this Section prior to 5:00 p.m. (New
York City time) on a Business Day, (b) the next Business Day after the
date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number specified in this Section on a day that
is not a Business Day or later than 5:00 p.m. (New York City time) on any
Business Day, (c) the Business Day following the date of mailing, if sent
by U.S. nationally recognized overnight courier service, or (d) upon
actual receipt by the party to whom such notice is required to be given.  The address for such notices and
communications shall be as follows:


 


If
to the Company:                                             Crdentia Corp.

5001 LBJ Freeway, Suite 850

Dallas, Texas 75244

Facsimile No.:  (972) 850-0780

Telephone No.: (972) 392-2722

Attention: Chief Executive Officer


 


With
a copy to:                                                             Kane Russell
Coleman & Logan PC

3700 Thanksgiving Tower

1601 Elm Street

Dallas, Texas 75201


Facsimile
No.:  (214) 777-4299

Attention:  Patrick V. Stark, Esq.


 


If
to an Investor:                                                       To the address
set forth under such Investor’s name on the signature pages hereof


 


or such other address as may
be designated in writing hereafter, in the same manner, by such Person.


 


Section 5.4                                      Amendments;
Waivers; No Additional Consideration.  No provision of this Agreement may be waived,
modified, supplemented or amended except in a written


 


21

















 


instrument signed, in the
case of an amendment, by the Company and the Investors holding a majority of
the Shares or, in the case of a waiver, by the party against whom enforcement
of such waiver is sought.  No waiver of
any default with respect to any provision, condition or requirement of this
Agreement shall be deemed to be a continuing waiver in the future or a waiver
of any subsequent default or a waiver of any other provision, condition or
requirement hereof, nor shall any delay or omission of either party to exercise
any right hereunder in any manner impair the exercise of any such right.


 


Section 5.5                                      Headings.  The headings herein are for convenience only,
do not constitute a part of this Agreement and shall not be deemed to limit or
affect any of the provisions hereof.  The
language used in this Agreement will be deemed to be the language chosen by the
parties to express their mutual intent, and no rules of strict
construction will be applied against any party.


 


Section 5.6                                      Successors and
Assigns.  This Agreement shall be
binding upon and inure to the benefit of the parties and their successors and
permitted assigns.  Other than in connection
with a merger, consolidation, sale of all or substantially all of the Company’s
assets or other similar change in control transaction, the Company may not
assign this Agreement or any rights or obligations hereunder without the prior
written consent of the Investors.  Any
Investor may assign any or all of its rights under this Agreement to any Person
to whom such Investor assigns or transfers any Securities, provided such
transferee agrees in writing to be bound, with respect to the transferred Securities,
by the provisions hereof that apply to the Investors.


 


Section 5.7                                      No Third-Party
Beneficiaries.  This
Agreement is intended for the benefit of the parties hereto and their
respective successors and permitted assigns and is not for the benefit of, nor
may any provision hereof be enforced by, any other Person, except as otherwise
set forth in Section 4.11.


 


Section 5.8                                      Governing Law.  All questions concerning the construction,
validity, enforcement and interpretation of the Transaction Documents shall be
governed by and construed and enforced in accordance with the internal laws of
the State of New York, without regard to the principles of conflicts of law
thereof.  Each party agrees that all
Proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement and any other Transaction Documents
(whether brought against a party hereto or its respective Affiliates, employees
or agents) shall be commenced exclusively in the New York Courts.  Each party hereto hereby irrevocably submits
to the exclusive jurisdiction of the New York Courts for the adjudication of
any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein (including with respect to the enforcement
of any of the Transaction Documents), and hereby irrevocably waives, and agrees
not to assert in any Proceeding, any claim that it is not personally subject to
the jurisdiction of any such New York Court, or that such Proceeding has been
commenced in an improper or inconvenient forum. 
Each party hereto hereby irrevocably waives personal service of process
and consents to process being served in any such Proceeding by mailing a copy
thereof via registered or certified mail or overnight delivery (with evidence
of delivery) to such party at the address in effect for notices to it under
this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to
limit in any way any right to serve process in any manner permitted by
law.  Each party hereto hereby
irrevocably waives, to the fullest extent permitted by applicable law, any and
all right to trial by jury in any


 


22

















 


legal proceeding arising out
of or relating to this Agreement or other Transaction Documents or the
transactions contemplated hereby or thereby. 
If either party shall commence a Proceeding to enforce any provisions of
a Transaction Document, then the prevailing party in such Proceeding shall be
reimbursed by the other party for its reasonable attorneys’ fees and other
costs and expenses incurred with the investigation, preparation and prosecution
of such Proceeding.


 


Section 5.9                                      Survival.  The agreements, covenants, representation and
warranties contained herein shall survive the Closing and the delivery or
exercise of the Securities, as applicable, until the third anniversary of the
Closing.


 


Section 5.10                                Execution.  This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. 
In the event that any signature is delivered by facsimile transmission,
such signature shall create a valid and binding obligation of the party
executing (or on whose behalf such signature is executed) with the same force
and effect as if such facsimile signature page were an original thereof.


 


Section 5.11                                Severability.  If any provision of this Agreement is held to
be invalid or unenforceable in any respect, the validity and enforceability of
the remaining terms and provisions of this Agreement shall not in any way be
affected or impaired thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.


 


Section 5.12                                Rescission and
Withdrawal Right. 
Notwithstanding anything to the contrary contained in (and without
limiting any similar provisions of) the Transaction Documents, whenever any
Investor exercises a right, election, demand or option under a Transaction
Document and the Company does not timely perform its related obligations within
the periods therein provided, then such Investor may rescind or withdraw, in
its sole discretion from time to time upon written notice to the Company, any
relevant notice, demand or election in whole or in part without prejudice to
its future actions and rights; provided, however, in the case of a rescission
of an exercise of a Warrant, the Investor shall be required to return any
shares of Common Stock subject to any such rescinded exercise notice.


 


Section 5.13                                Replacement of
Securities.  If any
certificate or instrument evidencing any Securities is mutilated, lost, stolen
or destroyed, the Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation thereof, or in lieu of and substitution
therefor, a new certificate or instrument, but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or destruction and
customary and reasonable indemnity, if requested.  The applicants for a new certificate or
instrument under such circumstances shall also pay any reasonable third-party
costs associated with the issuance of such replacement Securities.  If a replacement certificate or instrument
evidencing any Securities is requested due to a mutilation thereof, the Company
may require delivery of such mutilated certificate or instrument as a condition
precedent to any issuance of a replacement.


 


Section 5.14                                Remedies.  In addition to being entitled to exercise all
rights provided herein or granted by law, including recovery of damages, each
of the Investors and the Company


 


23

















 


will be entitled to specific
performance under the Transaction Documents. 
The parties agree that monetary damages may not be adequate compensation
for any loss incurred by reason of any breach of obligations described in the
foregoing sentence and hereby agrees to waive in any action for specific
performance of any such obligation the defense that a remedy at law would be
adequate.


 


Section 5.15                                Payment Set
Aside.  To the extent that the Company
makes a payment or payments to any Investor pursuant to any Transaction
Document or an Investor enforces or exercises its rights thereunder, and such
payment or payments or the proceeds of such enforcement or exercise or any part
thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside, recovered from, disgorged by or are required to be
refunded, repaid or otherwise restored to the Company, a trustee, receiver or
any other Person under any law (including, without limitation, any bankruptcy
law, state or federal law, common law or equitable cause of action), then to
the extent of any such restoration the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and
effect as if such payment had not been made or such enforcement or setoff had
not occurred.


 


Section 5.16                                Independent
Nature of Investors’ Obligations and Rights.  The obligations of each Investor under any
Transaction Document are several and not joint with the obligations of any
other Investor, and no Investor shall be responsible in any way for the
performance of the obligations of any other Investor under any Transaction
Document.  The decision of each Investor
to purchase Securities pursuant to the Transaction Documents has been made by
such Investor independently of any other Investor.  Each Investor’s obligations hereunder are
expressly not conditioned on the purchase by any or all of the other Investors
of the Shares.  Nothing contained herein
or in any Transaction Document, and no action taken by any Investor pursuant
thereto, shall be deemed to constitute the Investors as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Investors are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by the
Transaction Documents.  Each Investor
acknowledges that no other Investor has acted as agent for such Investor in
connection with making its investment hereunder and that no Investor will be
acting as agent of such Investor in connection with monitoring its investment
in the Securities or enforcing its rights under the Transaction Documents.  Each Investor shall be entitled to
independently protect and enforce its rights, including without limitation the
rights arising out of this Agreement or out of the other Transaction Documents,
and it shall not be necessary for any other Investor to be joined as an
additional party in any proceeding for such purpose.  Each Investor has been represented by its own
separate legal counsel in their review and negotiation of the Transaction
Documents.


 


Section 5.17                                Construction.  The parties agree that each of them and/or
their respective counsel has reviewed and had an opportunity to revise the
Transaction Documents and, therefore, the normal rule of construction to
the effect that any ambiguities are to be resolved against the drafting party
shall not be employed in the interpretation of the Transaction Documents or any
amendments hereto.


 


[Remainder of Page Intentionally Left Blank]


 


24

















 


IN
WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first above written.


 


	
   

  	
  CRDENTIA CORP.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Kaiser

  
	
   

  	
   

  	
  Name:
  John Kaiser

  
	
   

  	
   

  	
  Title:
  Chief Executive Officer

  



 


 


[Signature Pages for Investors Follow]


 


25

















 


IN
WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first above written.


 


	
   

  	
  NAME OF INVESTOR

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  Investment
  Amount:   $

  	
   

  
	
   

  	
  Tax
  ID No.:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ADDRESS FOR NOTICE

  
	
   

  	
   

  
	
   

  	
  c/o:

  	
   

  
	
   

  	
  Street:

  	
   

  
	
   

  	
  City/State/Zip:

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
  Tel:

  	
   

  
	
   

  	
  Fax:

  	
   

  
	
   

  	
   

  
	
   

  	
  DELIVERY INSTRUCTIONS

  
	
   

  	
  (if different from above)

  
	
   

  	
   

  
	
   

  	
  c/o:

  	
   

  
	
   

  	
  Street:

  	
   

  
	
   

  	
  City/State/Zip:

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
  Tel:

  	
   

  
													



 


26

















 


SCHEDULE
A


 


SCHEDULE
OF INVESTORS


 


	
  Name/Address

  	
   

  	
  Investment

  Amount

  	
   

  	
  Number of Shares

  Purchased at Closing

  	
   

  	
  Number of

  Warrant Shares

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  FatBoy Capital, LP

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9611 North U.S. Highway 1,
  Box 390

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sebastian, FL 32958

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Phone: (973) 426-0300

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fax: (973) 426-0313

  	
   

  	
  $

  	
  50,000

  	
   

  	
  166,667

  	
   

  	
  83,333

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Intertec Health Care
  Partners

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5980 Horton Street,
  Suite 390

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Emeryville, CA 94608

  	
   

  	
  $

  	
  25,000

  	
   

  	
  83,333

  	
   

  	
  41,667

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Latin Healthcare
  Investment, LLC

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  30 Nagog Park,
  Suite 210

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Acton, MA 01720

  	
   

  	
  $

  	
  50,000

  	
   

  	
  166,667

  	
   

  	
  83,333

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  MedCap Partners L.P.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  c/o MedCap Management and
  Research LLC

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  500 Third Street,
  Suite 535

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  San Francisco, CA 94107

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Phone: (415) 495-1010

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fax: (415) 495-1012

  	
   

  	
  $

  	
  375,000

  	
   

  	
  1,250,000

  	
   

  	
  625,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  MedCap Partners Offshore
  L.P.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  c/o MedCap Management and
  Research LLC

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  500 Third Street,
  Suite 535

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  San Francisco, CA 94107

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Phone: (415) 495-1010

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fax: (415) 495-1012

  	
   

  	
  $

  	
  375,000

  	
   

  	
  1,250,000

  	
   

  	
  625,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Norman C. Roberts Trust

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  c/o Norman Roberts

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2810 Hidden Valley Road

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  La Jolla, CA 92037-7925

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Phone: (858) 459-2481)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fax: (858) 456-7925)

  	
   

  	
  $

  	
  100,000

  	
   

  	
  333,333

  	
   

  	
  166,667

  	
   

  



 


1

















 


	
  Name/Address

  	
   

  	
  Investment

  Amount

  	
   

  	
  Number of Shares

  Purchased at Closing

  	
   

  	
  Number of

  Warrant Shares

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sandra L. Jones

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  930 Tahoe Boulevard,
  Suite 802-193

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Incline Village, NV 89451

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Phone: (775) 830-8192

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fax: (775) 832-6884

  	
   

  	
  $

  	
  25,000

  	
   

  	
  83,333

  	
   

  	
  41,667

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOTAL:

  	
   

  	
  $

  	
  1,000,000

  	
   

  	
  3,333,333

  	
   

  	
  1,666,667

  	
   

  



 


2

















 


EXHIBIT
A


 


FORM OF
WARRANT


 


1